There are plenty of hero's in the community including sports, business, and arts people, philanthropists and volunteers, all making an invaluable contribution to society.
I personally have huge admiration for those who succeed in business because although they are driven by personal ambition, they also create real prosperity, and opportunities for others.
They take huge chances often risking everything including their homes as they battle against all the obstacles imaginable. I can attest to the many challenges business people face having managed myself to survive the downturns of both the 1980's and the past few years.
For some the rewards are huge as evidenced by local businessman Rod Dury's topping the Hawke's Bay rich list with his IT company Zero, but for most its pretty much just working extremely hard often for little more than an average wage.
Two individuals presently stand out because they are having, or are about to have, a profound impact on our city centers, especially in Hastings.
The Hastings CBD has been a pretty much static scene for decades. The old Power Board, State Insurance, Wattie Industries and three bank buildings all date back to at least the early 1970's.
Now suddenly we are seeing a massive rebuild thanks primarily to two entrepreneurial individuals, Jonathan Wallace and Michael Whittaker.
The renaissance started when Wallace Development Company built the new Farmers Store on Heretaunga Street west which happened to incorporate Hawke's Bays first escalator. Next was the rebuild of the old Woolworths building one block nearer town across from the clock tower. Completing the trio and now apparently nearing completion is the rebuilt for Power Board building in Heretaunga St East, soon to be occupied by Hawke's Bay Today.
Now Michael Whittaker son of the former Mayor of Havelock North has purchased the derelict old Albert Hotel and is developing ideas for site. Whilst many of us had a nostalgic hope the oldest commercial building in town could be saved, it has become increasingly clear the choices were to demolish and redevelop or wait until it collapsed in a cloud of borer dust and rat droppings. At the same time he has purchased the old Bon Marche building on the opposite side of the street.
Whilst his plans are uncertain at this stage, it is clear he has the vision and the financial clout to do something worthwhile.
Following the hammering we received from rodgernomics in the 1980's Heretaunga St has been at a standstill. Successive councils have tried to change the situation including turning part of it into a mall, then when that didn't work, abandoning that idea and opening it back up to traffic. The outcomes have been far from successful despite the considerable cost to ratepayers .
So now, at no cost to ratepayers we have two individuals with the confidence necessary to rescue our CBD. I am confident they will succeed if only because they are taking on the risks, and that is always a major incentive to get it right.
It couldn't have happened a moment too soon. The impact of the Christchurch earthquakes is the realisation many of our buildings would not stand up to a similar seismic event.
I love old architecture. It has a grace and elegance that is mostly missing from today's structures. The jewel in the Hastings crown has to be the Opera House and adjacent Civic Chambers, but there are plenty of other great examples of Art Deco and Spanish Mission structures, and most are likely to need work to bring them up to even the minimum 33% of code.
This could have resulted in wasteland as owners decided strengthening or rebuilding was just not financially viable. We might have ended up with large areas demolished and used for car parking or even abandoned. In a worst scenario the CBD could have been deserted in favour of a full migration in the direction of the old Nelson Park. Have a look at Market St North without Farmers, The Warehouse and Stationery to see where we might have been headed.
Its impossible to see that happening now. With Farmers anchoring the redevelopment of Heretaunga St and many other new developments in the pipeline we seem to have turned the corner.
Hastings history is full of other visionary people including Francis Hicks, Thomas Tanner, the Williams and the Chambers, but in the decades to come we are likely to be thankful for the vision and enterprise shown by Michael Whittaker and Jonathan Wallace because they started the rejuvenation of Hastings .
Sunday, September 1, 2013
Thursday, August 8, 2013
We need more people
It's official, we are shrinking. The most recent population estimates from Statistics New Zealand reveal we have fewer people living in Hawke's Bay than a year ago.
Population growth is a major driver of economic activity. More people means more houses, more tradesmen, more appliances, more roads, in fact more of just about everything.
For many decades we have rated as the 5th largest population centre in the country, but this may no longer be the case. Almost certainly Tauranga has eclipsed us and Dunedin is not far behind. Less people means contraction, and lets not fool ourselves, that is where we are heading unless we find ways to turn things around.
Generally anyone setting up new businesses need to be where the action is. Big cities are huge magnets dragging in even more people, more jobs more everything. If we shrink we will not only fail to attract new employers, we will likely start loosing some of those we have.
Already Auckland is ten times larger than all of Hawke's Bay. Projections of another million in our largest city when we are expect to remain static means in just a few decades Auckland will be nearly 20 times larger.
Already our best and brightest young are being sucked out at an alarming rate, attracted by educational opportunities jobs and the lure of the bright lights. We will never match Auckland for size or growth but if we allow ourselves to start contracting we will soon find ourselves in deep trouble.
For a start we will loose what little political bargaining power we still have. Suddenly services we take for granted will be sourced elsewhere. Areas such as specialist medical services and education will likely be early casualties. This already happens but it could be very much worse.
Last month the city of Detroit, once home of the automobile industry, declared itself bankrupt owing $US 18 billion. Between 2000 and 2010, the number of residents declined by 250,000 continuing a pattern that has seen the city population decline by some 60% from it's 1950's peak.
I take some small comfort in the fact that the Mayor of Hastings agreed with me when he recently wrote “Hawke's Bay needs to wake up to what is happening to our economy and region.” (HBT 2/7/13) Sadly though, I have to point out that we are in this sorry state after he has spent nearly two decades on council, twelve as Mayor.
Hawke's Bay's leadership has been too engrossed for far too long with building monuments such as Splash Plant, the Opera House, the Aquarium and Museum. Looking at all the concrete and glass knowing it was “their baby” makes them feel good . The problem is the economic justification has been weak, so inevitably these structures have become a burden on ratepayers. In Hastings this has been especially severe because the projects have been debt financed.
Such projects may have served political objectives but have done nothing to improve economic performance, and it is the latter we badly need.
There is an unwillingness by our leadership to acknowledge the true state of affairs. I was told recently that we must be positive. My response is we must acknowledge our problems if we have any hope of solving them. So how are we to turn things around?
Tourism a mainstay of our economy struggles as visitor numbers decline according to the Statistics New Zealand Commercial Accommodation Monitor.
We need to do something about the inadequacy of our air services. If we were as close to Auckland as Hamilton and other places are, it would not be an issue, but many of the destinations we compete with are much closer to our major cities, and/or have more affordable air connections. The tyranny of Air New Zealand's monopoly position must be broken if we want Hawke's Bay to be an attractive place to visit.
Better air services will also help us retain and attract businesses. Any organisation trading with the rest of the country or the world needs to travel, and if we are more expensive or difficult than elsewhere then we will be less competitive.
To cap it all off, yet another independent report, the Winder report stage 1 tells us that our work force is under qualified and we have only half the national average percentage of university graduates.
Huge amounts of money are being sucked out of our economy so our young can receive the education they need. We need more of this money to stay here and we need the job opportunities a bigger and more diverse education offering would provide.
We all know we have a great climate, an enjoyable lifestyle, and fairly affordable housing. That's why so many of us came and stayed. Whilst we are attractive to those at, or approaching the end of their working lives it is clear people are leaving in droves, and these are the young, the brightest, and the most motivated.
This sorry state of affairs has not just happened. It has been clear for for many years that Hawke's Bay was slipping behind. If our leaders have failed to see the signs and develop growth policies, there is little chance they will do so if returned to office in the forth coming elections
Population growth is a major driver of economic activity. More people means more houses, more tradesmen, more appliances, more roads, in fact more of just about everything.
For many decades we have rated as the 5th largest population centre in the country, but this may no longer be the case. Almost certainly Tauranga has eclipsed us and Dunedin is not far behind. Less people means contraction, and lets not fool ourselves, that is where we are heading unless we find ways to turn things around.
Generally anyone setting up new businesses need to be where the action is. Big cities are huge magnets dragging in even more people, more jobs more everything. If we shrink we will not only fail to attract new employers, we will likely start loosing some of those we have.
Already Auckland is ten times larger than all of Hawke's Bay. Projections of another million in our largest city when we are expect to remain static means in just a few decades Auckland will be nearly 20 times larger.
Already our best and brightest young are being sucked out at an alarming rate, attracted by educational opportunities jobs and the lure of the bright lights. We will never match Auckland for size or growth but if we allow ourselves to start contracting we will soon find ourselves in deep trouble.
For a start we will loose what little political bargaining power we still have. Suddenly services we take for granted will be sourced elsewhere. Areas such as specialist medical services and education will likely be early casualties. This already happens but it could be very much worse.
Last month the city of Detroit, once home of the automobile industry, declared itself bankrupt owing $US 18 billion. Between 2000 and 2010, the number of residents declined by 250,000 continuing a pattern that has seen the city population decline by some 60% from it's 1950's peak.
I take some small comfort in the fact that the Mayor of Hastings agreed with me when he recently wrote “Hawke's Bay needs to wake up to what is happening to our economy and region.” (HBT 2/7/13) Sadly though, I have to point out that we are in this sorry state after he has spent nearly two decades on council, twelve as Mayor.
Hawke's Bay's leadership has been too engrossed for far too long with building monuments such as Splash Plant, the Opera House, the Aquarium and Museum. Looking at all the concrete and glass knowing it was “their baby” makes them feel good . The problem is the economic justification has been weak, so inevitably these structures have become a burden on ratepayers. In Hastings this has been especially severe because the projects have been debt financed.
Such projects may have served political objectives but have done nothing to improve economic performance, and it is the latter we badly need.
There is an unwillingness by our leadership to acknowledge the true state of affairs. I was told recently that we must be positive. My response is we must acknowledge our problems if we have any hope of solving them. So how are we to turn things around?
Tourism a mainstay of our economy struggles as visitor numbers decline according to the Statistics New Zealand Commercial Accommodation Monitor.
We need to do something about the inadequacy of our air services. If we were as close to Auckland as Hamilton and other places are, it would not be an issue, but many of the destinations we compete with are much closer to our major cities, and/or have more affordable air connections. The tyranny of Air New Zealand's monopoly position must be broken if we want Hawke's Bay to be an attractive place to visit.
Better air services will also help us retain and attract businesses. Any organisation trading with the rest of the country or the world needs to travel, and if we are more expensive or difficult than elsewhere then we will be less competitive.
To cap it all off, yet another independent report, the Winder report stage 1 tells us that our work force is under qualified and we have only half the national average percentage of university graduates.
Huge amounts of money are being sucked out of our economy so our young can receive the education they need. We need more of this money to stay here and we need the job opportunities a bigger and more diverse education offering would provide.
We all know we have a great climate, an enjoyable lifestyle, and fairly affordable housing. That's why so many of us came and stayed. Whilst we are attractive to those at, or approaching the end of their working lives it is clear people are leaving in droves, and these are the young, the brightest, and the most motivated.
This sorry state of affairs has not just happened. It has been clear for for many years that Hawke's Bay was slipping behind. If our leaders have failed to see the signs and develop growth policies, there is little chance they will do so if returned to office in the forth coming elections
Sunday, June 16, 2013
Higher Education will boost the economy
Most recent commentaries on Hawke's Bay draw attention to our near bottom rating in many social and economic indices. Some also draw attention to disparity in the educational qualifications of our labour force, compared with national averages.
The recently released Winder Report on economic prosperity reveals only 14.2% of the Hawke's Bay/Gisborne population have university qualifications, compared to 27% nationally. This is a huge disparity, and is a serious indictment on our business and political leaders. Formal qualifications measure both knowledge and academic achievement, and therefore give a strong indication of having the skills to do the job. Simple logic suggests if we do not have a work force with the right qualifications, we will not attract high skilled, high paying jobs..
The report also shows we have a very much higher proportion of jobs in lower paid occupations such as Agriculture, Forestry and Fishing (16.4% verses 7.1% nationally) where incomes are just half the average for all employment categories, plus many fewer (5.3% verses 8.5%) in the very much higher paid Professional, Scientific and Technical categories. Not surprising of course because we are a centre of primary production.
That Hawke's Bay has a lower proportion of academically qualified people should be of concern to us all. We may find it difficult to attract businesses and organisations that need highly qualified people, and our businesses may not be able to compete against businesses elsewhere. We may also miss out on knowledge industries and all this means people are more likely to earn lower incomes.
It also suggests as a community we may not be placing a high value on formal qualifications. That is parents are less likely to see higher education as a priority for their children, and if the problem becomes multi-generational we risk ending up with a general dumbing down of the population.
There are a range of reasons for our poor figures but the single most significant has to be the lack of educational opportunities for our young people. This is not to suggest the EIT is doing a poor job, but rather we need additional opportunities. We simply do not have the range of tertiary education offerings of other comparable centres. Polytechnic education is part of the mix, not a substitute for university level qualifications.
We are the 5th largest urban area in the country after the three main centres and Hamilton all of which with Dunedin and Palmerston North, have both stand alone universities, and polytechnics of at least comparable size and offering to our own EIT. In fact Auckland Wellington and Christchurch have multiple university campuses.
We are also missing out on the huge economic injection a University campus would provide. A just released investigation has estimated direct spending by students and staff, plus downstream effects from the University of Otago to be worth $780 million dollars annually to Dunedin, providing 16% of GDP and 17 000 full time equivalent jobs.
Whilst Hawke's Bay is unlikely to gain a similar 21 000 student facility, a stand alone branch campus of an existing institution is essential. As most university funding comes from Government our own campus will not inflict increased costs on ratepayers. Additionally Hawke's Bay parents and their children will save huge sums now being spent obtaining university level qualifications elsewhere.
Hawke's Bay has a near static population because so many people leave the area. Offering better educational opportunities would help stem the outflow especially of our young people.
We must not permit Government to fob us off any longer. We must have a more skilled and better educated workforce if we want a dynamic economy. It's time we got serious about this issue
The recently released Winder Report on economic prosperity reveals only 14.2% of the Hawke's Bay/Gisborne population have university qualifications, compared to 27% nationally. This is a huge disparity, and is a serious indictment on our business and political leaders. Formal qualifications measure both knowledge and academic achievement, and therefore give a strong indication of having the skills to do the job. Simple logic suggests if we do not have a work force with the right qualifications, we will not attract high skilled, high paying jobs..
The report also shows we have a very much higher proportion of jobs in lower paid occupations such as Agriculture, Forestry and Fishing (16.4% verses 7.1% nationally) where incomes are just half the average for all employment categories, plus many fewer (5.3% verses 8.5%) in the very much higher paid Professional, Scientific and Technical categories. Not surprising of course because we are a centre of primary production.
That Hawke's Bay has a lower proportion of academically qualified people should be of concern to us all. We may find it difficult to attract businesses and organisations that need highly qualified people, and our businesses may not be able to compete against businesses elsewhere. We may also miss out on knowledge industries and all this means people are more likely to earn lower incomes.
It also suggests as a community we may not be placing a high value on formal qualifications. That is parents are less likely to see higher education as a priority for their children, and if the problem becomes multi-generational we risk ending up with a general dumbing down of the population.
There are a range of reasons for our poor figures but the single most significant has to be the lack of educational opportunities for our young people. This is not to suggest the EIT is doing a poor job, but rather we need additional opportunities. We simply do not have the range of tertiary education offerings of other comparable centres. Polytechnic education is part of the mix, not a substitute for university level qualifications.
We are the 5th largest urban area in the country after the three main centres and Hamilton all of which with Dunedin and Palmerston North, have both stand alone universities, and polytechnics of at least comparable size and offering to our own EIT. In fact Auckland Wellington and Christchurch have multiple university campuses.
We are also missing out on the huge economic injection a University campus would provide. A just released investigation has estimated direct spending by students and staff, plus downstream effects from the University of Otago to be worth $780 million dollars annually to Dunedin, providing 16% of GDP and 17 000 full time equivalent jobs.
Whilst Hawke's Bay is unlikely to gain a similar 21 000 student facility, a stand alone branch campus of an existing institution is essential. As most university funding comes from Government our own campus will not inflict increased costs on ratepayers. Additionally Hawke's Bay parents and their children will save huge sums now being spent obtaining university level qualifications elsewhere.
Hawke's Bay has a near static population because so many people leave the area. Offering better educational opportunities would help stem the outflow especially of our young people.
We must not permit Government to fob us off any longer. We must have a more skilled and better educated workforce if we want a dynamic economy. It's time we got serious about this issue
Tuesday, May 14, 2013
The decline of tourism
The last cruise ship has left our shores for this season leaving behind we are told, some $25 million spent by 80 000 passengers. This is an astonishing $312.50 for each passenger. Considering most are here for just a few hours, and spend nothing on accommodation, and not a lot on food, this figure seems highly suspect. Even if the passenger numbers are understated and the correct figure is nearer 100 000 this still equates to a dubious $250 each.
Just how well our visitor industry is doing is hard to determine. Some operators such as Splash Planet in Hastings and Horse of the year seem to have had a very good year. but others such as the Mission Concert were down significantly.
The visitor industry is vitally important to Hawke's Bay accounting for 5 - 10% of all economic activity. Our local economy is dominated by horticulture, viticulture, forestry, and pastoral farming, and much of our manufacturing is also closely aligned to these activities. Visitors provide diversification meaning not all is bad when adverse climatic events such as droughts happen.
Whilst all visitors are welcome they are not all equal in terms of their economic impact. The most valuable are the people who stay in paid accommodation, such as motels or hotels, and homestays, eat out in our many good food places and visit the various activities on offer including Art Deco, Horse of the year and the Mission.
Especially valuable are business travellers who mostly seem willing to splash out on food and accommodation. Those attending conferences are also very valuable and even a medium sized event can be worth $100 000 to our region. Conferences unfortunately seem to be bypassing Hawke's Bay these days.
Whilst we are very good at crowing about our successes we seem to be reluctant to acknowledge where we are not doing so well. The Statistics New Zealand Commercial Accommodation Monitor records the numbers staying in our motels, hotels, backpackers and camping grounds. For 2012 these reveal Napier Visitor arrivals were down -32,627 or -11.0% on just a year earlier and guest nights down -47,884 or -8.4%, continuing a trend that started in 2005. From the peak in 2005 Napier arrivals are now down 66 600 and bed nights down 90 400.
Hawke's Bay Tourism believe these official figures miss many who stay privately or in home stays, and now adjust the official numbers with the results of a Private Household Survey, a survey of unknown reliability and relevance. Certainly the official figures appear the ones with the consistency necessarily for regional comparisons, or comparisons over time. There is a risk we may be deluding ourselves if the results are simply being used to paint a better picture.
So we are getting mixed messages. If we look at passenger numbers through Hawke's Bay airport we see a reduction. Between 2008 and 2012 passenger numbers have declined from 449 126 to 444 708. We also know numbers were down for the Mission concert, and the Hawke's Bay Opera House is struggling to attract conferences that just a few years ago were quite regular.
We also need to be wary about the boom in cruise ship visitors because we have no control over their their itineraries or whether they continue calling here. After all when summer is over the ships simply leave for other destinations and for six months or more we are deserted. Additionally once Europe and North America move out of the economic doldrums the shipping companies may simply decide there are richer pickings elsewhere.
There are many hard working and very committed individuals trying to make this industry succeed yet there is evidence we are doing less well than we could be. Its timely we question whether we are handling our visitor promotion efforts in the most effective way. Ratepayers are providing $850 000 a year in funding to Hawke's Bay Tourism, and Napier and Hastings councils and individual businesses spend millions more.
Is the Hawke's Bay Regional Regional Council the appropriate organisation to be controlling Hawke's Bay Tourism? The councils previous efforts through Venture Hawke's Bay and Hawke's Bay Inc were not highly successful, though this should hardly be surprising since neither the staff or councillors appear to have serious tourism experience. It seems strange to hand over the right to market Hawke's Bay to an organisation with no other involvement in the visitor industry, when the Hastings and Napier Councils have invested a hundred million dollars or more on amenities.
Another potential conflict is the presence on the tourism board of Dave Simmons a senior Air New Zealand executive who clearly is not going to point the finger at Hawke's Bay air services as many others here and elsewhere appear to be doing.
One thing is certain. If Hawke's Bay is to capitalise on the potential of this vital sector, the true state of the visitor industry must be revealed, there needs to be better coordination between the players, and a clearly defined, and widely accepted strategy agreed on, so we are all moving in the same direction.
Just how well our visitor industry is doing is hard to determine. Some operators such as Splash Planet in Hastings and Horse of the year seem to have had a very good year. but others such as the Mission Concert were down significantly.
The visitor industry is vitally important to Hawke's Bay accounting for 5 - 10% of all economic activity. Our local economy is dominated by horticulture, viticulture, forestry, and pastoral farming, and much of our manufacturing is also closely aligned to these activities. Visitors provide diversification meaning not all is bad when adverse climatic events such as droughts happen.
Whilst all visitors are welcome they are not all equal in terms of their economic impact. The most valuable are the people who stay in paid accommodation, such as motels or hotels, and homestays, eat out in our many good food places and visit the various activities on offer including Art Deco, Horse of the year and the Mission.
Especially valuable are business travellers who mostly seem willing to splash out on food and accommodation. Those attending conferences are also very valuable and even a medium sized event can be worth $100 000 to our region. Conferences unfortunately seem to be bypassing Hawke's Bay these days.
Whilst we are very good at crowing about our successes we seem to be reluctant to acknowledge where we are not doing so well. The Statistics New Zealand Commercial Accommodation Monitor records the numbers staying in our motels, hotels, backpackers and camping grounds. For 2012 these reveal Napier Visitor arrivals were down -32,627 or -11.0% on just a year earlier and guest nights down -47,884 or -8.4%, continuing a trend that started in 2005. From the peak in 2005 Napier arrivals are now down 66 600 and bed nights down 90 400.
Hawke's Bay Tourism believe these official figures miss many who stay privately or in home stays, and now adjust the official numbers with the results of a Private Household Survey, a survey of unknown reliability and relevance. Certainly the official figures appear the ones with the consistency necessarily for regional comparisons, or comparisons over time. There is a risk we may be deluding ourselves if the results are simply being used to paint a better picture.
So we are getting mixed messages. If we look at passenger numbers through Hawke's Bay airport we see a reduction. Between 2008 and 2012 passenger numbers have declined from 449 126 to 444 708. We also know numbers were down for the Mission concert, and the Hawke's Bay Opera House is struggling to attract conferences that just a few years ago were quite regular.
We also need to be wary about the boom in cruise ship visitors because we have no control over their their itineraries or whether they continue calling here. After all when summer is over the ships simply leave for other destinations and for six months or more we are deserted. Additionally once Europe and North America move out of the economic doldrums the shipping companies may simply decide there are richer pickings elsewhere.
There are many hard working and very committed individuals trying to make this industry succeed yet there is evidence we are doing less well than we could be. Its timely we question whether we are handling our visitor promotion efforts in the most effective way. Ratepayers are providing $850 000 a year in funding to Hawke's Bay Tourism, and Napier and Hastings councils and individual businesses spend millions more.
Is the Hawke's Bay Regional Regional Council the appropriate organisation to be controlling Hawke's Bay Tourism? The councils previous efforts through Venture Hawke's Bay and Hawke's Bay Inc were not highly successful, though this should hardly be surprising since neither the staff or councillors appear to have serious tourism experience. It seems strange to hand over the right to market Hawke's Bay to an organisation with no other involvement in the visitor industry, when the Hastings and Napier Councils have invested a hundred million dollars or more on amenities.
Another potential conflict is the presence on the tourism board of Dave Simmons a senior Air New Zealand executive who clearly is not going to point the finger at Hawke's Bay air services as many others here and elsewhere appear to be doing.
One thing is certain. If Hawke's Bay is to capitalise on the potential of this vital sector, the true state of the visitor industry must be revealed, there needs to be better coordination between the players, and a clearly defined, and widely accepted strategy agreed on, so we are all moving in the same direction.
A timely exit
The decision by Napier Mayor Barbara Arnott to step aside shows excellent judgement. The situation is different in Hastings where the Mayor like his predecessor Jeremy Dwyer is seeking a 5th term.
Too often political leaders seem to think they are indispensable. They arrive with fresh ideas, enthusiasm, and without baggage, and are welcomed by electors. In time their support starts to slip with failures and a history of things that have annoyed voters.
Eventually if they do not accept their time is over and stand aside, the voters will make the decision for them. We saw it with Winston Churchill, Rob Muldoon, Helen Clarke, Kerry Prendergast, and our own Rick Barker. All failed to see they were trying to win one election too many.
Whilst there is no hard and fast rule on how long a politicians should stay in power it seems anything over eight or nine years is generally too much especially if they are in a leadership position.
Existing office holders have a clear advantage over those seeking office for the first time. Name recognition is very much stronger, and its possible to campaign continuously whilst simply doing the job. However there comes a time when hanging onto the power, prestige, and even the income predominates everything else.
All this raises the question of whether there should be legal limits on how long Prime Ministers, Mayors and even run of the mill MP's and councillors should be allowed to remain in office. In the United States after Franklin D Roosevelt died early into his 4th term Congress decided to amend the constitution and limit presidents to a maximum of two terms or eight years.
For a leader such as a Mayor or Prime Minister 3 terms of 3 years seems about the maximum but of course the rule is not absolute. Generally to stay longer than desirable is to be remembered for failures and disasters.
Most political leaders want to be remembered for their successes and timing is critical to achieve that. Mrs Arnott seems to have picked the right moment to exit and her legacy includes the development of McLean Park for the Rugby World Cup, and the Museum extensions.
Too often political leaders seem to think they are indispensable. They arrive with fresh ideas, enthusiasm, and without baggage, and are welcomed by electors. In time their support starts to slip with failures and a history of things that have annoyed voters.
Eventually if they do not accept their time is over and stand aside, the voters will make the decision for them. We saw it with Winston Churchill, Rob Muldoon, Helen Clarke, Kerry Prendergast, and our own Rick Barker. All failed to see they were trying to win one election too many.
Whilst there is no hard and fast rule on how long a politicians should stay in power it seems anything over eight or nine years is generally too much especially if they are in a leadership position.
Existing office holders have a clear advantage over those seeking office for the first time. Name recognition is very much stronger, and its possible to campaign continuously whilst simply doing the job. However there comes a time when hanging onto the power, prestige, and even the income predominates everything else.
All this raises the question of whether there should be legal limits on how long Prime Ministers, Mayors and even run of the mill MP's and councillors should be allowed to remain in office. In the United States after Franklin D Roosevelt died early into his 4th term Congress decided to amend the constitution and limit presidents to a maximum of two terms or eight years.
For a leader such as a Mayor or Prime Minister 3 terms of 3 years seems about the maximum but of course the rule is not absolute. Generally to stay longer than desirable is to be remembered for failures and disasters.
Most political leaders want to be remembered for their successes and timing is critical to achieve that. Mrs Arnott seems to have picked the right moment to exit and her legacy includes the development of McLean Park for the Rugby World Cup, and the Museum extensions.
Saturday, April 20, 2013
Giving ratepayers money to the Crown
At the March meeting of the Hastings District Council, Hawke's Bay Airport Limited advised they hoped next year to pay an $84 000 dividend. Presumably in proportion to their shareholding Napier will receive about the same and the government double the sum.
Any return to councils will of course be appreciated, but it might have been very much higher were it not for an utterly extraordinary decision made a few years ago by the Napier and Hastings Councils.
Way back in 1963 the then five territorial councils, Napier, Hastings, Taradale, Havelock North, and the County signed an Joint Venture agreement with the Crown to upgrade the Beacons aerodrome just north of Napier to accommodate the soon to arrive NAC Fokker Friendship turboprops. The councils jointly provided nearly 500 acres of land and also funded half the cost of the construction.
The agreement contained some very significant clauses. The councils had sole right to appoint directors, the councils owned the land, and the councils could build anything they wanted on the land so long as it did not endanger aeronautical operations.
Roll on to 1989 and the County and Havelock North disappeared following a major local Government reorganisation. Napier had adsorbed Taradale many years earlier. The airport shares then consolidated into approximately quarter each for Napier and Hastings and half for the crown.
In 2008 the two councils agreed to replace the JV agreement with a new corporate structure. This agreement gave the Crown the right to appoint two of the four board members, and for the two councils to rent the land to the airport for 60 years at one dollar a year.
Effectively Hawke's Bay people lost control of their airport with corporatisation. More importantly it will transfer millions of dollars of future income from the councils to Government.
For a start if the councils had charged the airport rent for use of the land, that income would have been tax free in the hands of the councils. Instead it becomes taxable income to the airport businesses, effectively loosing 28% of its value.
The amount remaining after tax is then owned approximately 50/50 by the councils and Government meaning the crown has taken a total of 64% or nearly 2/3rds of the value of the rent, where as had the councils charged rent directly they would have received 100%.
So how much is all this worth. Well if the land was worth say $5 million and the councils charged 10% of that value annually, the rent would be worth $500, 000 a year, split 50/50 Napier/Hastings, or $250, 000 each.
That is the councils will receive only about one third of the rent had the airport been directly charged a fair rent for using the land. Even if the value of the land or the return less the councils would still have received significantly more than they will. The loss to our community of this arrangement over the 60 years could easily be a very substantial 30 million dollars.
The details that has led to this situation was kept away from public scrutiny with disclosure under the official information act denied, and delayed until it was a done deal following official requests to the ombudsman.
Any return to councils will of course be appreciated, but it might have been very much higher were it not for an utterly extraordinary decision made a few years ago by the Napier and Hastings Councils.
Way back in 1963 the then five territorial councils, Napier, Hastings, Taradale, Havelock North, and the County signed an Joint Venture agreement with the Crown to upgrade the Beacons aerodrome just north of Napier to accommodate the soon to arrive NAC Fokker Friendship turboprops. The councils jointly provided nearly 500 acres of land and also funded half the cost of the construction.
The agreement contained some very significant clauses. The councils had sole right to appoint directors, the councils owned the land, and the councils could build anything they wanted on the land so long as it did not endanger aeronautical operations.
Roll on to 1989 and the County and Havelock North disappeared following a major local Government reorganisation. Napier had adsorbed Taradale many years earlier. The airport shares then consolidated into approximately quarter each for Napier and Hastings and half for the crown.
In 2008 the two councils agreed to replace the JV agreement with a new corporate structure. This agreement gave the Crown the right to appoint two of the four board members, and for the two councils to rent the land to the airport for 60 years at one dollar a year.
Effectively Hawke's Bay people lost control of their airport with corporatisation. More importantly it will transfer millions of dollars of future income from the councils to Government.
For a start if the councils had charged the airport rent for use of the land, that income would have been tax free in the hands of the councils. Instead it becomes taxable income to the airport businesses, effectively loosing 28% of its value.
The amount remaining after tax is then owned approximately 50/50 by the councils and Government meaning the crown has taken a total of 64% or nearly 2/3rds of the value of the rent, where as had the councils charged rent directly they would have received 100%.
So how much is all this worth. Well if the land was worth say $5 million and the councils charged 10% of that value annually, the rent would be worth $500, 000 a year, split 50/50 Napier/Hastings, or $250, 000 each.
That is the councils will receive only about one third of the rent had the airport been directly charged a fair rent for using the land. Even if the value of the land or the return less the councils would still have received significantly more than they will. The loss to our community of this arrangement over the 60 years could easily be a very substantial 30 million dollars.
The details that has led to this situation was kept away from public scrutiny with disclosure under the official information act denied, and delayed until it was a done deal following official requests to the ombudsman.
Tuesday, January 22, 2013
The way forward
The grand plan for Hawke's Bay is not working. Economic indices including recent retail turnover figures are mostly heading the wrong way, and we are regularly bottom ranked in regional comparisons.
Official population figures reveal near zero growth mainly because more people are leaving than arriving. We may no longer be the 5th largest urban area in the country and soon we could drop to 7th.
Whilst things will turn around as they always do this might just give us a false sense of well being. Sure we must stay positive, but if we don't acknowledge the problems, we will never find the solutions necessary to lift us from the bottom of the heap. We must find options for getting more money into our economy, more people, more factories, more retailers, more businesses, and more jobs, plus an increased share of the right sort of government spending.
While councils do have have a critical role to play, big ideas like the Civic Centre upgrade or the Museum will make little difference. The obligation on Councils to promote social, economic, environmental and cultural well being has been removed from local government responsibilities, but meeting these requirements often produced little of value despite costing ratepayers millions of dollars. Councils role in contributing to economic stimulus might be better concentrated on reducing costs, rates and fees, and leaving more money in peoples pockets, thereby improving the vitality of our businesses and rural enterprises.
The Regional Council's Ruatanawha Water storage project could make a difference and we are told it will create 2000 new jobs and add millions to our GDP. All good if it happens but the cost is estimated to be $230 million and the economics have yet to be verified. What will the water cost, and can farmers afford it? What risks are being imposed on ratepayers without their knowledge, and does the HBRC have the expertise to handle such an immense scheme. Most importantly it is a long term project that could take 10 years or more to bear fruit and we badly need a leg up before then.
Whilst we don't want to become another Auckland, we really do need more people living here, and more visiting. Cruise ships are delivering a very useful 100 000 day trippers each year but that is less than the reduction in recent years of our traditional customers, who stay longer, spend more, and provide a broader spread of benefits. Placing so much importance on ship visits is also a risky strategy as evidenced by Celebrity Cruises deciding to bypass us this season.
However boosting tourism is probably the only way we can get a lift in activity without taking huge risks. More visitors will create more jobs, encourage new businesses, and generally improve vitality. We particularly need to win back the very beneficial conference trade we seem to have lost.
Of course we are dreaming if we expect this to happen when we have some of the highest air fares in the country. International travellers from our traditional markets such as the USA, UK and Europe are also declining, but realistically we are unlikely to make up the losses from the fast growing Chinese segment. Australia still provides nearly half this countries international arrivals, and if we are to prosper we must have direct Aussie flights.
This means we must regain control of the airport, meaning the entire board needs to be replaced with people of vision who understand just how vitally important it is that we have competitive transport links.
We also need to coordinate our tourism activities. How is it all three councils have separate tourism operations, and why is the Regional Council even involved, when the Napier and Hastings Councils control almost every aspect of the visitor trade.
Whilst getting more people living here permanently is essential, actually making it happen is a huge challenge. Perhaps a simpler way might be to provide better educational opportunities so our young don't have to go elsewhere, often to never return. The 9 000 students at EIT is about the same number as polytechnics in Hamilton, Palmerston North and Dunedin, but all these centres also have universities. Otago University has a staggering 21 000 students, Waikato 12 000 students plus 2000 academic staff, and Massey Manawatu has 8500 students.
We need concrete proposals to add 10 000 additional full time equivalent academic places within 10 years. We cannot continue to accept excuses from Government(s) and others for not making it happen. A university level establishment could attract thousands of highly paid professionals, would bring in hundreds of millions of dollars of new spending each year, and would save Hawke's Bay families many tens of millions in accommodations costs that they are now having to spend elsewhere.
.
We must also give urgency to putting right the under achievement by far too many Maori and Pacifika. In just a few years these groups could comprise 40% of people entering our workforce. Welfare is a shrinking option. We must transform these people into an motivated, educated, and highly productive resource to create improved prosperity for us all.
Perhaps others have better ideas but what ever they are they must be achievable. If we don't change how we do things in the future, we are going to get the same outcomes as in the past. If we don't do something soon we are going to be asking the last person leaving to turn out the lights.
Official population figures reveal near zero growth mainly because more people are leaving than arriving. We may no longer be the 5th largest urban area in the country and soon we could drop to 7th.
Whilst things will turn around as they always do this might just give us a false sense of well being. Sure we must stay positive, but if we don't acknowledge the problems, we will never find the solutions necessary to lift us from the bottom of the heap. We must find options for getting more money into our economy, more people, more factories, more retailers, more businesses, and more jobs, plus an increased share of the right sort of government spending.
While councils do have have a critical role to play, big ideas like the Civic Centre upgrade or the Museum will make little difference. The obligation on Councils to promote social, economic, environmental and cultural well being has been removed from local government responsibilities, but meeting these requirements often produced little of value despite costing ratepayers millions of dollars. Councils role in contributing to economic stimulus might be better concentrated on reducing costs, rates and fees, and leaving more money in peoples pockets, thereby improving the vitality of our businesses and rural enterprises.
The Regional Council's Ruatanawha Water storage project could make a difference and we are told it will create 2000 new jobs and add millions to our GDP. All good if it happens but the cost is estimated to be $230 million and the economics have yet to be verified. What will the water cost, and can farmers afford it? What risks are being imposed on ratepayers without their knowledge, and does the HBRC have the expertise to handle such an immense scheme. Most importantly it is a long term project that could take 10 years or more to bear fruit and we badly need a leg up before then.
Whilst we don't want to become another Auckland, we really do need more people living here, and more visiting. Cruise ships are delivering a very useful 100 000 day trippers each year but that is less than the reduction in recent years of our traditional customers, who stay longer, spend more, and provide a broader spread of benefits. Placing so much importance on ship visits is also a risky strategy as evidenced by Celebrity Cruises deciding to bypass us this season.
However boosting tourism is probably the only way we can get a lift in activity without taking huge risks. More visitors will create more jobs, encourage new businesses, and generally improve vitality. We particularly need to win back the very beneficial conference trade we seem to have lost.
Of course we are dreaming if we expect this to happen when we have some of the highest air fares in the country. International travellers from our traditional markets such as the USA, UK and Europe are also declining, but realistically we are unlikely to make up the losses from the fast growing Chinese segment. Australia still provides nearly half this countries international arrivals, and if we are to prosper we must have direct Aussie flights.
This means we must regain control of the airport, meaning the entire board needs to be replaced with people of vision who understand just how vitally important it is that we have competitive transport links.
We also need to coordinate our tourism activities. How is it all three councils have separate tourism operations, and why is the Regional Council even involved, when the Napier and Hastings Councils control almost every aspect of the visitor trade.
Whilst getting more people living here permanently is essential, actually making it happen is a huge challenge. Perhaps a simpler way might be to provide better educational opportunities so our young don't have to go elsewhere, often to never return. The 9 000 students at EIT is about the same number as polytechnics in Hamilton, Palmerston North and Dunedin, but all these centres also have universities. Otago University has a staggering 21 000 students, Waikato 12 000 students plus 2000 academic staff, and Massey Manawatu has 8500 students.
We need concrete proposals to add 10 000 additional full time equivalent academic places within 10 years. We cannot continue to accept excuses from Government(s) and others for not making it happen. A university level establishment could attract thousands of highly paid professionals, would bring in hundreds of millions of dollars of new spending each year, and would save Hawke's Bay families many tens of millions in accommodations costs that they are now having to spend elsewhere.
.
We must also give urgency to putting right the under achievement by far too many Maori and Pacifika. In just a few years these groups could comprise 40% of people entering our workforce. Welfare is a shrinking option. We must transform these people into an motivated, educated, and highly productive resource to create improved prosperity for us all.
Perhaps others have better ideas but what ever they are they must be achievable. If we don't change how we do things in the future, we are going to get the same outcomes as in the past. If we don't do something soon we are going to be asking the last person leaving to turn out the lights.
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